Electronic Contracting

The long-term effectiveness of electronic contracting will indeed be determined by the courts. Assuming that the use of the electronic contract will become more widespread, the potential to speed business dealings will become almost endless. With the electronic contract, whether it is a standard automated licensing agreement or a formal contract written for a specific case requiring an electronic signature, both time and money could be saved. With the electronic contract, the need of human processing of electronic commerce will no longer be needed though the system may have to become more formal. "Internet commerce was often characterized by a surprising lack of automation because information entered into Web forms was often received and processed by the Web site operator as if it were a fax or telex, without any automation at all. If this switch from human processes to machine processes is successful, it will require a greater degree of formalization of business custom and practice than was true with the first or second generation of electronic commerce." (Winn, 2002)

Much of the formalization will indeed be in the form of ensuring authenticity. The Electronic Signature in Global and National Commerce Act gives e-signatures the same force as if they were printed on paper. An e-contract can be in the form of a "Click to Agree" contract, which is commonly used when downloading software or gaining use to sites such as eBay: The user clicks an "I Agree" button which is usually preceded by the sites user agreement policy. Because there is no notary present to identify the signer there must be passwords, identifying code words and the like to help to identify the person as the correct individual. "Since a traditional ink signature isn't possible on an electronic contract, people use several different ways to indicate their electronic signatures, including typing the signer's name into the signature area, pasting in a scanned version of the signer's signature, clicking an "I Accept" button, or using cryptographic "scrambling" technology. "Cryptography is the science of securing information."" (Nolo.com)Without these security measures, issues of fraud and identity theft would be a constant threat.

Another problem with the electronic contract is that it will have to be constantly revised as e-commerce develops. There are more and more technologies created every day and with the ever changing way we use information technology, more and more laws are sure to be written to compensate for these changes. Also, as software becomes outdated, old contracts and file systems will have to be integrated into new systems. Unlike hard copy documents which never go out of style, electronic documents are only viewable if the computer they are on has the appropriate software to run them. Should an entire system crash, without back-ups, all of the electronically stored information would be lost forever.

This also applies to the actual implementation of the electronic contract. All parties involved must have the appropriate software in order to